2020 Half-yearly financial report June 30, 2020 June 30, 2020 Half-yearly financial report 2020 | Half-yearly financial report at June 30, 2020 These Financial Statements are available at the website www.a2a.eu 1 Contents Corporate boards 5 1 Key Figures of the A2A Group Business Units 8 Geographical areas of activity 10 Group structure 12 Financial highlights at June 30, 2020 13 Shareholdings 16 A2A S.p.A. on the Stock Exchange 17 Alternative Performance Indicators (APM) 19 2 Consolidated results and report on operations Summary of results, assets and liabilities and financial position 24 Significant events during the period 32 Significant events after June 30, 2020 37 COVID-19 virus health emergency and the effects of the pandemic on half-year and annual results and the value of the assets (IAS 36) 38 3 Consolidated financial statements Consolidated balance sheet 44 Consolidated income statement 46 Consolidated statement of comprehensive income 47 Consolidated cash-flow statement 48 Statement of changes in Group equity 50 Detail of the balance sheet highlighting the first-time consolidation effect of 2020 acquisitions 52 Consolidated balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010 54 Consolidated income statement pursuant to Consob Resolution no. 17221 of March 12, 2010 56 4 Notes to the Half-yearly financial report General information 58 Half-yearly financial report 59 Financial statements 60 Basis of preparation 61 Changes in international accounting standards 62 Scope of consolidation 63 Consolidation policies and procedures 64 Seasonal nature of the business 69 Summary of results sector by sector 70 Notes to the balance sheet 74 Net debt 94 Notes to the income statement 97 Earnings per share 105 Note on related party transactions 106 Consob Communication no. DEM/6064293 of July 28, 2006 109 Guarantees and commitments with third parties 110 Other information 111 2 A2A Half-yearly financial report at June 30, 2020 5 Attachments to the notes to the Half-yearly financial report 1. Statement of changes in tangible assets 140 2. Statement of changes in intangible assets 142 3. List of companies included in the consolidated financial statements 144 4. List of shareholdings in companies carried at equity 150 5. List of holdings in other companies 153 6 Evolution of the regulation and impacts on the Business Units of the A2A Group Generation and Trading Business Unit 156 Market Business Unit 167 Waste Business Unit 171 Networks and District Heating Business Unit 178 International Business Unit 193 7 Scenario and market Macroeconomic scenario 196 Energy market trends 198 8 Result sector by sector Result sector by sector 203 Generation and Trading Business Unit 204 Market Business Unit 207 Waste Business Unit 210 Networks and District Heating Business Unit 212 International Business Unit 214 Corporate 215 9 Risks and uncertainties Risks and uncertainties 218 10 Sustainability responsible management Sustainability responsible management 228 11 Certification of the condensed half-yearly financial statements pursuant to art. 154-bis, paragraph 5 of Legislative Decree no. 58/98 Certification of the condensed half-yearly financial statements pursuant to art. 154-bis, paragraph 5 of Legislative Decree no. 58/98 232 12 Independent Auditor’s Report 233 This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2020” and has been prepared solely for the convenience of international readers. In the event of any ambiguity the Italian text will prevail. The Italian original is available on the websitewww.a2a.eu . 3 A2A Half-yearly financial report at June 30, 2020 Corporate boards Corporate boards BOARD OF DIRECTORS CHAIRMAN Marco Emilio Angelo Patuano DEPUTY CHAIRMAN Giovanni Comboni CEO AND GENERAL MANAGER Renato Mazzoncini DIRECTORS Stefania Bariatti Vincenzo Cariello Federico Maurizio d’Andrea Luigi De Paoli Gaudiana Giusti Fabio Lavini Christine Perrotti Secondina Giulia Ravera Maria Grazia Speranza BOARD OF STATUTORY AUDITORS CHAIRMAN Giacinto Gaetano Sarubbi STANDING AUDITORS Maurizio Leonardo Lombardi Chiara Segala ALTERNATE AUDITORS Antonio Passantino Patrizia Tettamanzi INDEPENDENT AUDITORS EY S.p.A. 5 1 Key figures of the A2A Group 1 Key figures of the A2A Group Business Units The A2A Group operates in the production, sale and distribution of gas and electricity, district heating, environmental services and the integrated water cycle. These sectors are in turn attributable to the “Business Units” specified in the following scheme identified following the reorganization made by management: Generation Networks and and Trading District Heating • Thermoelectric, • Electricity networks hydroelectric and other • Gas networks renewable plants • Integrated water cycle • Energy Management • District Heating services • Heat management services • Development Market and management of technological • Sale of Electricity infrastructures for and Gas integrated digital • Energy efficiency services • Electric mobility • Public lighting International • Provision of know-how Waste and technologies for the construction of waste • Waste collection and pre-treatment plants street sweeping • Treatment • Disposal and energy recovery Corporate • Corporate services This breakdown into Business Units reflects the organization of financial reports regularly analyzed by management and the Board of Directors in order to manage and plan the Group’s business. 8 A2A Half-yearly financial report at June 30, 2020 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2020 Shareholdings A2A S.p.A. on the Stock Exchange Alternative Performance Indicators (APM) 9 1 Key figures of the A2A Group Geographical areas of activity Hydroelectric plants Thermoelectric plants Cogeneration plants Waste treatment plants Photovoltaic plants Technological partnerships Updated to June 30, 2020 10 A2A Half-yearly financial report at June 30, 2020 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2020 Shareholdings A2A S.p.A. on the Stock Exchange Alternative Performance Indicators (APM) 11 1 Key figures of the A2A Group 100.00% 50.00% Group A2A gencogas Ergosud structure 100.00% A2A Energiefuture 100.00% A2A Rinnovabili Generation and Trading 94.72% LumEnergia Market 100.00% A2A Energia(3) Waste 50.00% Networks and District Heating Metamer 100.00% 75.00% Other Companies A2A Energy Solutions Consul System 100.00% 100.00% A2A Illuminazione Suncity Energy Pubblica 99.69% 100.00% Acel Energie(2) Amsa 100.00% 100.00% A2A Ambiente Aprica 100.00% 100.00% Linea Gestioni(1) Lomellina Energia(4) 100.00% Linea Ambiente(1) 100.00% ACSM-AGAM Ambiente(2) 100.00% A2A S.p.A. A2A Ciclo Idrico 100.00% A2A Calore & Servizi 60.00% Proaris 100.00% Linea Green(1) 93.35% LD Reti(1) 100.00% Unareti 91.60% Retragas 89.00% Camuna Energia 74.80% ASVT (1) Shareholdings held through 100.00% Linea Group Holding S.p.A. Lereti(2) (held 51%). (2) Shareholdings held through ACSM-AGAM S.p.A. 100.00% Varese Risorse(2) (held 41.34%). (3) 12.80% held through Linea Group Holding S.p.A.. 100.00% (4) 35.70% held through A2A Smart City Linea Ambiente S.r.l.. 51.00% This chart shows the most Linea Group Holding significant shareholdings of the A2A Group. See attachments 3, 4 and 5 for full details of 41.34% shareholdings. ACSM-AGAM 12 A2A Half-yearly financial report at June 30, 2020 Financial highlights at June 30, 2020 (**) 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2020 Shareholdings A2A S.p.A. on the 3,181 559 Stock Exchange millions of euro millions of euro Alternative Performance REVENUES GROSS OPERATING Indicators (APM) INCOME 154 millions of euro RESULT OF THE PERIOD Income statement figures 01 01 2020 01 01 2019 millions of euro 06 30 2020 06 30 2019 Revenues 3,181 3,711 Operating expenses (2,267) (2,775) Labour costs (355) (354) Gross operating income - EBITDA 559 582 Depreciations, amortization, provisions and write-downs (278) (255) Net operating income - EBIT 281 327 Result from non-recurring transactions - - Financial balance (38) (65) Result before taxes 243 262 Income taxes (78) (87) Net result from discontinued operations (2) - Minorities (9) (9) Group result of the period 154 166 Gross operating income/Revenues 17.6% 15.7% (**) The figures serve as performance indicators as required by CESRN/05/178/B. 13 1 Key figures of the A2A Group Balance sheet figures 06 30 2020 12 31 2019 millions of euro Net capital employed 7,015 6,805 Equity attributable to the Group and minorities 3,582 3,651 Consolidated net financial position (3,433) (3,154) Consolidated net financial position/Equity attributable to the Group and minorities 0.96 0.86 Consolidated net financial position / EBITDA 6.1 2.6 Financial data 01 01 2020 01 01 2019 millions of euro 06 30 2020 06 30 2019 Net cash flows from operating activities 350 527 Net cash used in investing activities (337) (258) Free cash flow (Cash Flow Statement figure) 13 269 Key indicators 06 30 2020 12 31 2019 Average 6-month Euribor (0.268%) (0.302%) Average price of Brent (US$/bbl) 42.2 64.1 Average of the PUN (Single Nationwide Price) Base load (Euro/MWh) 32.2 52.3 Average of the PUN (Single Nationwide Price) Peak load (Euro/MWh) 35.6 58.4 Average price of coal (Euro/tonne) 41.7 54.4 Average price of gas to the PSV (*) (Euro/MWh) 9.2 16.0 Average price of emission certificates EU ETS (**) (Euro/tonne) 22.1 24.9 (*) Price of gas of reference for the Italian market (**) EU Emissions Trading System 14 A2A Half-yearly financial report at June 30, 2020 1 Group’s key operational indicators 06 30 2020 06 30 2019 Key Figures of the A2A Group Business Units Generazione and Trading Geographical Thermoelectric production (GWh) 4,882 5,767 areas of activity Hydroelectric production (GWh) 1,912 1,857 Group structure Financial Electricity sold to wholesale customers (GWh) 6,253 5,177 highlights at June Electricity sold on the Power Exchange (GWh) 6,689 6,404 30, 2020 Market Shareholdings A2A S.p.A.